QUESTION: How often should I review my insurance policies?

BY
James M. Edwards, P.C.
1401 17th Street, Suite 330
Denver, CO 80202
(303) 293-8191
FAX (303) 292-0924
http://JamesEdwardsLawFirm.Com

ANSWER: The best answer is to do so whenever a significant change occurs in your life (marriage, divorce, birth of a child, a teenager now driving, a new car, change in economic position) or at least once a year. Now that it is spring, and spring cleaning time, it is probably a good idea to tune up your insurance coverages just as you would tune up your bike before going for a ride.
There are many types of insurance policies that cover us or our businesses: homeowners, health care, vehicles, personal and business liability, worker's compensation and so on. Some of these may not be subject to your control. For example, health insurance terms and conditions may be selected by the employer. But others are up to us and it is a good practice to make sure you have adequate, and not merely the legal minimum, coverages. The time to find out is before the coverage is needed not when it is too late to help.
When home value is rising, you should make sure that your policy is sufficient to replace your home at the increased costs and values. If your policy only covers what you paid for the property some years ago, then you could be in for quite a shock if a short circuit causes a fire that destroys your home.
Auto coverage used to be pretty simple. Now there are many coverage options--deductibles, PPO plans, low income policies. Many of these may not be right for you but may seem attractive because of certain cost savings. Make sure you understand what your rights and obligations will be in the event of an accident. That $1,000 deductible may seem attractive until you are not working because of an accident and cannot afford to pay the $1,000 for medical care or repairs you need. With liability policies, I have seen experts counsel people to carry only the minimums because you can save money on the premiums and "can always go to Bankruptcy Court" to get rid of any larger debt. This is truly shortsighted and potentially very damaging to you. The minimum limits required by law for property damage are not enough to replace many of today’s cars. So if you have the minimums, better be careful who you hit! Also, bankruptcy may not be an option if you have equity in your home, a good job, not much other debt or have a desire to someday soon buy a house and get a mortgage.

It is true that rates are high in Colorado, but the way to save money is not to cheat yourself on coverages important to you and your family. Learn why rates are high and what can be done individually and collectively, to lower those rates from the source and not at the user level.

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JAMES M. EDWARDS, P.C. is a general practice law office with an emphasis on personal injury matters and motor vehicle claims. The office also handles traffic matters, criminal matters, insurance questions, and consumer issues. The office of JAMES M. EDWARDS, P.C. is located at 1401 17th Street, Suite 330, Denver, CO 80202, (303) 293-8191, Fax 292-0924. Initial consultations are available at no cost.

Copyright 2008, James M. Edwards, P.C. All Rights Reserved. No portion of this article may be reprinted or republished without permission of the author. The article is meant to advise the reader of general legal principles and trends. It is not case specific legal advice. If you would like further information, or would like to see a specific topic addressed in a future article, please contact the author.